Close to the Brink on a Government Shutdown

MOST POPULAR

Negotiations to avert a possible government shutdown at 12:01 a.m. on Saturday were always likely to go down to the wire as each side sought to maximize its leverage. But the chances of a shutdown appear to be growing as the deadline nears and discussions between Republicans and Democrats remain mired in uncertainty, mistrust and frustration.

Republican leaders are reportedly considering attaching a long-term reauthorization of the Children’s Health Insurance Program to short-term spending measure that would likely keep the government funded until mid-February, gambling that Democrats would not be willing to vote against funding that they have sought for months.

“The GOP strategy seeks to force Senate Democratic leader Charles Schumer of New York to decide whether this is the moment to force a showdown on immigration that results in a partial government shutdown in an election year,” Bloomberg reported.

Republicans will need Democratic votes in the Senate — and possibly in the House as well if conservatives in that chamber object to a funding measure that does not meet their demands on defense spending. Democrats continue to say that any deal must restore the Deferred Action for Childhood Arrivals program’s protections for undocumented immigrants who were brought to the United States as children. Democrats also insist that any budget increases for the military be matched for domestic spending.

The talks have been complicated by the firestorm over the reported vulgar remarks made by Trump at Thursday’s meeting with lawmakers to discuss DACA. In the wake of the meeting, the president and lawmakers have spent more time pointing fingers than pushing forward with talks. “The Democrats want to shut down the Government over Amnesty for all and Border Security,” Trump tweeted Tuesday. Democrats, meanwhile, say the burden is on Trump to move the negotiations forward after he shot down the bipartisan immigration proposal last week.

“The mood is so raw over immigration that this issue alone could prompt a shutdown, so I think chances of a shutdown on Friday at midnight are a bit above 50%,” Greg Valliere, the chief global strategist at Horizon Investments, told the Journal.

Whether the government shuts down or not, it seems certain that we’re headed for at least a few more days of brinksmanship. “We think odds favor a CR but the path to one is not straight, so we think there could be several instances this week when a shutdown looks likely,” KBW analyst Brian Gardner write in a note to clients Tuesday.

House Republican leaders are expected to meet with their members Tuesday night to discuss the negotiations, according to the Journal, and congressional leaders from both parties are set to meet Wednesday, The Washington Post reported.

As editor in chief, Yuval Rosenberg oversees all aspects of The Fiscal Times' website and email newsletter. His writing has appeared in publications including BusinessWeek, CNBC.com, CNNMoney.com, Fast Company, Fortune, Newsweek, Money and Time.